U.S. MARKET AVERAGES

Stock markets rebounded from the higher start of the session and have been recently trading in the negative territory as investors digest a lot of economic data, showing the real impact of hurricanes Katrina and Rita.

The pre-market sentiment was lifted by strong third-quarter earnings report from General Electric, which came in line with analysts’ expectations. Another boost came from the British-based Hilton Group which confirmed that it is selling its hotels to Vortjh American Hilton Hotels Corp for $6.3 billion.

Strength in the health care and financial sectors helped to limit the downside trend in the early going.

The HMO sector is among the best performers in the early going, rising by 2.6%, boosted by UnitedHealth (UNH: chart) which advances more than 4% on strong quarterly results. Disk drive, software and housing stocks also post gains

The gold sector is posting a decline of 2.4%, adding to losses recorded over the last days. Energy stocks are extending recent losses with the oil sector down 1.4%.

Charlotte Russe (CHIC: chart) is one of the biggest gainers in the early going, posting uplifted fourth-quarter earnings guidance. The stock is currently up 18%.

Waters (WAT: chart) is one of the morning's worst performers, down by 12% on lowered Q3 earnings outlook.

MOVERS AND SHAKERS

General Electric Co. (GE: chart) is expected to gain after the industrial conglomerate reported third-quarter revenue that beat analyst expectations. The company’s third-quarter net income increased to $4.68 billion, or 44 cents a share, compared with $4.07 billion, or 38 cents a share, for 2004.

Carmaker General Motors Corp. (GM: chart) has informed the United Auto Workers union that an agreement must come within a few days. This agreement has a purpose to cut the company’s $5.6 billion annual U.S. health-care bill. Otherwise the company could act unilaterally to cut UAW health-care expenses, according to The Wall Street Journal report. General Motors added 1.7%.

Ford Motor Co. (F: chart) could be under pressure after Citigroup cut the company to “sell” and reduced its price target by $3. The company gained 3.5% yesterday.

Chip maker Texas Instruments (TXN: chart) fell 2.2% after Bear Stearns downgraded its rating to “peer perform” from “outperform” because of increased competition, pricing pressure and a slower expected growth rate for its digital light processing business in 2006.

Continental Airlines Inc. (CAL: chart) was upgraded by Lehman Bros to “equal-weight” from “underweight”, citing hopes that industry fundamentals are improving as domestic carriers finally begin to cut down capacity. The broker said that Continental will surely benefit from an improving domestic pricing environment. Continental jumped 3.8%.

United Parcel Services Inc. (UPS: chart) is expected to gain after J.P. Morgan upgraded the company to “overweight” from “neutral”, pointing multiple potential drivers of growth including international parcel, supply chain services and acquisitions. The broker said that the domestic market is stabilizing. UPS fell 0.9% yesterday.

Hilton Hotels Corp. (HLT: chart) is in talks to acquire the hotel division of British company Hilton Group Plc. for 3.6 billion pounds ($6.3 billion). The deal would unite the North American and British-based international Hilton brands for the first time in more than 40 years. Hilton Group (HG: chart) was up 12.1% in London trading..

ECONOMIC NEWS

Consumer prices rose 1.2% in September on higher energy prices, exceeding expectations of 0.9% rise. following 0.5% increase the previous two months.

Consumer prices rose particularly sharply in the month of September, according to a report from the Department of Labor, with the increase exceeding economist estimates. The sharp rise in prices was largely due to a significant increase in energy prices.

The Labor Dept. said that consumer prices rose 1.2 percent in September after rising 0.5 percent in each of the two previous months. Economists had been expecting a somewhat more modest increase of about 0.9 percent.